September 30, 2019
A pyrrhic victory for Kurz
Sebastian Kurz won a historic victory in Austria's national elections yesterday. The ÖVP won 37% nationwide, leading in all counties except Vienna. The party increased its share by 5pp, also thanks to voters from far-right FPÖ. The real challenge is now to build a stable coalition government. None of the other parties is a natural partner, and coalition building will be a protracted affair.
Theoretically Kurz has three options for a two-party government:
Most talked about is a coalition with the Greens, the biggest winner in these elections emerging with 14% up from 4% last time. Both parties performed much better than expected in the polls. But the Greens are not keen to govern with Kurz, and neither are ÖVP voters keen on a coalition with the Greens.
The second possibility is to re-run the coalition with the FPÖ. Kurz kept this option open during the campaign. This strategy served him well, as FPÖ voters who were alienated by the corruption affair that triggered the election switched camps towards the ÖVP or abstained. But the FPÖ said last night that it wants to go into opposition. A coalition with the FPÖ would be risky also for Kurz, who cannot afford a second break-up of a coalition government.
The third is a coalition with the social democrats, the SPÖ. But the two parties are far apart politically. Also the SPÖ will first have to digest their loss of all but one county. Not a natural solution from either side.
A coalition with the liberals, Neos, may be ideal for 40% of the ÖVP voters. Neos did well, gaining votes in these elections too. But their 7.8% share will still not be enough to make them a single coalition partner. The so-called Dirndl coalition, together with the Greens, is another possibility discussed in the media. This three-party coalition would not be necessary in terms of numbers, but perhaps it would be politically. Could Neos be the bridge between ÖVP and the Greens? Perhaps. But negotiations are sure to be complicated.
Another option is a minority government, but Kurz would then have to do some parliamentary power-brokering. Kurz might be an excellent campaigner, but does he have what it takes to run such an unreliable majority? António Costa pulled this off in Portugal by striking a deal with the Left bloc and the communists. But it takes constant reassurances of trust and a lot of teamwork. Also Portugal benefited from a positive economic environment. For Austria the outlook is much gloomier. As the German industry takes a dive, Austria will be hit too. Against this background Kurz will have to weigh his chances, while the potential partners will have to evaluate their readiness to govern with him. Kurz has an incentive to get a government up and running, as an election re-run would be risky too. The other parties know this and will extract as much as possible out of the coming negotiations. Commentators expect long negotiations, with no government in place until the end of the year.